Local Realtors Comment on Lawsuit’s Potential Effects on Market
Last month, the National Association of Realtors (NAR), an organization that represents over a million real estate agents nationwide, concluded several class-action lawsuits and agreed to pay a staggering $418 million in damages to homeowner groups. Subject to court approval, this settlement will significantly alter the regulations concerning negotiations and disclosures of real estate commissions on the Multiple Listing Service (MLS).
In the traditional real estate procedure, agents negotiating the sale of a property – representing both buyers and sellers – would share a commission of 5-6% of the property’s value. This commission would be listed on the MLS ahead of any negotiations. Homeowner groups argued that this format essentially factors the commission into the property’s price, thus circumventing any negotiations over agent fees prior to the commencement of the home-buying process.
Due to the settlement, as of this summer, sellers will no longer be allowed to list the buyer’s agent commission amount on the MLS. This change creates room for negotiations concerning such commissions. Realtors in Daniel Island have weighed in on what this modification could mean for the local marketplace.
Jeff Leonard, president and broker-in-charge at Daniel Island Real Estate, commented that this new regulation could require adaptations in business strategies, but affirmed that seasoned agents are equipped to handle any arising challenges.
Meanwhile, Tricia Peterson, owner of Island House Real Estate, has pointed out that in South Carolina, listing agreements have always transparently stated the commissions to be paid. She emphasized that commissions have always been up for negotiation and that it has always been a standard practice to mandate prospective property buyers to sign agreements with buyer’s agents before viewing any properties.
Potential Impact on Sellers
Ashley Severance, owner and broker at Atlantic Properties, doesn’t anticipate a drastic impact on home sellers. She believes that while sellers may start opting not to pay for the buyer’s agent’s commission, buyers might offset this by factoring the commission into their offer. Most buyers, she pointed out, would prefer to have the commission worked into the price of the house, to spread out the expense over time.
Jacquie Dinsmore, a real estate agent at Carolina One, pointed out the constant evolution of the industry, and speculated that the future of real estate transactions could focus on employing agents that offer a value-added approach.
The Future of Real Estate Practices
Sally Castengera of Corcoran HM Properties and Evan Murray echoed these sentiments and stressed the need for more upfront disclosures and honest dialogues with all involved parties. Murray also noted that the ruling could significantly affect first-time homebuyers who haven’t had the opportunity to accumulate equity and will now be saddled with additional costs.
Overall, the consensus among Daniel Island real estate professionals is that while these changes will demand adjustment, they are quite prepared to navigate through them.
